Parliament discussed the 2013 state budget draft on November 13. The chief reporter was the Finance Minister, Nodar Khaduri. According to the draft, social expenses and administrative expenditure have been significantly reduced. Various initiatives encouraged by the president have been abolished through the draft.
State budget draft remains unacceptable for minority
By Gvantsa Gabekhadze
Wednesday, November 14
Khaduri emphasized that nominal GDP will be increased by 10-12% for the next year and will consist of 29.3 million GEL. Stability of the national currency exchange rate will also be retained.
The Ministry of Health will be financed with GEL 740 million and pensioners will not be divided into categories.
Financing of the Ministry of Refugees and Resettlement will be doubled and the Ministry will no longer be moving to Gori.
National Security Council will have the “necessary minimal funding.” The funding of regional governors will be seriously reduced as well. The president’s reserve fund will be decreased from GEL 50 million to GEL 10 million. The government’s reserve fund remains unchanged (GEL 50 million).
The student employment program will be abolished. According to Khaduri, the program was a pre-election PR stunt suggested by the previous government. Project My First Computer will be preserved.
Income tax will not be changed and will remain at 20%. However, the concept of the unrated minimum will be established. The unrated minimum will be GEL 500 monthly and will consist of GEL 6,000 annually.
The minority claims that the majority is using the financial document as a political lever. According to MP, Irma Nadirashvili, the document reveals that the coalition is increasing the financing of all those fields which are being controlled by them when the funding of those sectors which are under National Movement’s influence are seriously restricted.
“I am interested in whether the Ministry of Finance is using its other departments for political revenge or not? How can you explain the entering of your 50 men group to the Public Broadcaster,” Nadirashvili asked Khaduri.
Khaduri responded that there will not be a “financial oasis” in the country anymore and all institutions will be equally checked.
“The Public Broadcaster managed to accumulate GEL 3.8 million in two years when Kavkasia TV was sequestered for GEL 2 for a day being late to pay this,” Khaduri said.
As an economic analyst and lecturer, Irakli Khmaladze told The Messenger the current government had to work on the budget draft in a very short period of time.
“In general, working on such a document requires much time. That is why the document is not as perfect as it should be. In general, the draft answers to public demands regarding universal healthcare or social assistance. However, the current government still requires time and consultations to conclude the process,” Khmaladze said.
Concerning the reduction of the President’s reserve fund Khmaladze underscored that it is not tragedy and explained that GEL 10 million is not a small amount.
Khmaladze also commented on the income tax and the new concept of unrated minimum. According to him, this was the correct, social step from the government’s side for assisting those people who have small monthly incomes.
“In general, I think that 20% income tax is quite normal for Georgia, as there is no social tax in the country. Georgian’s have not to pay such a tax when people in almost all European countries have to pay this. Thus, when there is no such fee, 20% income tax is quite normal in my mind,” Khmaladze said.